Sebi proposes norms for shifting firms on IGP to regular trade category

Markets regulator Sebi on Monday released draft norms for allowing companies listed on innovators growth platform (IGP) to trade under regular category of the main board.

A company should be listed for a minimum period of one year on the IGP and have at least 200 shareholders at the time of making application to trade under the regulator category of main board, according to the consultation paper floated by Sebi.

The IGP, earlier known as Institutional Trading Platform', has been created to facilitate listing of start-ups or new age ventures in sectors like e-commerce, biotechnology and data analytics.

According to the proposed norms, none of the promoters or directors of the company should be a fugitive economic offender.

Regarding lock-in requirements, Sebi proposed that the minimum promoters' contribution should be 20 per cent of the total capital.

In case of shortfall, alternative investment funds, foreign venture capital investors, scheduled commercial banks among other institutions may contribute a maximum of 10 per cent to meet prescribed minimum contribution requirement.

In addition, the minimum promoters' contribution including contribution made by specified institutions shall be locked in for a period of three years from the date on which trading approval in main board is granted.

Any excess over and above the 20 per cent of promoter's holding shall be locked-in for a period of one year, Sebi said.

Wherever an entity has served a lock-in period of six months at the time of listing on the IGP, and wishes to move to the regular trade category of the main board after completion of listing on the IGP for one year, such period shall be deducted from the stipulated lock-in requirements of three years and one year, as may be applicable, it added.

The condition of lock in would not apply for company which has been listed on the IGP for a minimum period of three years or more.

Further, the companies which propose to move to the regular category of main board will have to comply with the relevant provisions of ICDR norms.

Sebi in its board meeting in December 2018 had approved amendments pertaining to institutional trading platform in the ICDR (Issue of Capital and Disclosure Requirements) Regulations.

After deliberations with concerned stakeholders, Sebi proposed norms for shifting a company listed on innovators growth platform (IGP) to regular trade category of the main board, Sebi said.

The regulator has sought comments from the public on the proposals in the specified format till June 10.